Samsung has introduced the 5.5 inch Galaxy Note II, the latest model in what is becoming perhaps the most diverse lineup of tablet models in the computer industry.

The company already has 7- and 10-inch tablets and it’s got smartphones with screens in the 4+ inch range and smaller. And of course it’s got the 5-inch Galaxy Note.

While the official unveiling didn’t take place until the evening of Oct. 24, T-Mobile was already selling the Note II. Sprint will follow T-Mobile by one day, but the selling price is a little lower. Samsung introduced the Note II a day after Apple introduced the long-anticipated iPad Mini and the surprise fourth-generation iPad.

However, unlike most tablet and tablet-like devices, the Note II is aimed at business users that also like to do things such as play games. The Note II is obviously not a normal smartphone, but unlike the tablets on the market, it works like one when you want to make phone calls. It’s an attractive device that actually fits into most pockets, just like a phone.

But when you use it, the Note II is more like a tablet. The 5.5 inch screen is big enough to read or write on and it comes with Samsung’s S Pen that lets you create drawings and to write handwritten notes, which the Note II will translate into text, if you’re lucky. But there’s also no question that this isn’t like a basic 7-inch tablet.

So the big question is where exactly does the Note II fit in the world of devices? It gets the “phablet” moniker because it’s part phone and part tablet, but in use it’s mostly a tablet. For some users, the highly portable Note II form factor is a real plus.

It’s easy to carry, you can cradle it in one hand while you write or type with the other and you can attach a cover for protection or privacy. In some part of the world this combination seems to be wildly popular. When I was at CeBIT in March, the original Note seemed to my casual observations to be the preferred mobile device of the under-30 age group, at least in Europe.

By having it, you don’t need to carry two devices, a phone and a tablet. You can do both functions as effectively with the Note II as you could with the earlier Note.

Even though it looks a little odd to be holding a device the size of a paperback book up to your face to make a phone call, at least you can do it. Presumably this could save money and cut down on clutter. So it’s clear there’s a market here.

But how much of a market is there really? If you look at the range of available smartphones as they morph into the range of tablets it becomes harder to figure out where one ends and the other begins. Smartphones, such as Samsung’s Galaxy S III are nearly as big as the Note. The Note is almost as large as the Nexus 7 from Google, which in turn is only slightly smaller than the iPad Mini. You can see where this is going.

Right now it’s beginning to seem as if there’s going to be a tablet choice of some sort available in half-inch increments. But how finely can you divide the market for tablets and tablet-like devices? Surely there must be a point at which customers simply throw their hands in the air and buy whatever their friends are buying. And of course, this may be the idea behind the iPad Mini, which would be to enter a market so you can define it and then make it the default choice.

But the Galaxy Note II seems as if it’s kind of squashed into the nether regions of Smartphone Hell; it’s too big to really be a phone, but too small to really be a tablet. It’s not really of either world, but is something else entirely. But it turns out that that “something else” is actually surprisingly useful once you learn its place in the growing dimensionless space of smartphones. Or tablets. Or something.

What makes the Note different is that it’s handy. It fits into one hand easily, you can actually take notes on it as you would with a paper pocket notebook and the screen is big enough to see things. So perhaps if users move beyond trying to classify the Note II, they’ll figure out where it fits in their own world, which is what matters.

Considering how popular the original Note turned out to be, users may very well have figured where the Note II fits in the market. But unfortunately the world has changed. Now, if you choose to buy the Note from T-Mobile, it will cost you exactly the same thing as you’d pay for an Apple iPad Mini.

Which one will users choose? Unless they really need a phone, which most people don’t, my guess is they’ll choose the iPad Mini. Sorry Samsung, but the tablet market has changed. The Note II is very nice, but I think its market is drying up.